Can this man make his video gaming team a $1 billion...

Jack Etienne is fighting to convince companies that e-sports fans will spend as much as other sports lovers.

Photo: Blizzard Entertainment

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Jack Etienne has convinced some of the technology world’s top investors, including venture capitalist Peter Thiel, that video game competitions are worth their money.

Photo: Patrick T. Fallon / Bloomberg

Jack Etienne had gone from an eager photocopier salesman with an obsessive evening-and-weekends video game habit to the CEO at a professional video-game-playing company that generates millions of dollars a year in sponsorships. In 2017, he spent more than $30 million for a spot in two of the world’s top e-sports leagues. Now his Silicon Valley investors expect him to turn his team, Cloud9, into a global entertainment business, and Etienne is fighting to convince major companies that his oddball fan base has just as much money to spend as other sports lovers.

There are early signs of Cloud9’s promise. Last year, Etienne convinced some of the technology world’s top investors that video game competitions were worth their money. Peter Thiel’s San Francisco venture capital firm, Founders Fund, and Craft Ventures wrote him the biggest checks. Altogether they poured $28 million into Cloud9, the team Etienne founded in 2013 by buying a group of “League of Legends” players out of their contracts for less than $20,000.

Cloud9, C9 for short, is the most popular e-sports team in North America, according to Nielsen Esports, a market research group. The Santa Monica team has hundreds of wins playing more than a dozen video games. Cloud9 has a roster of more than 70 players, many living in team-owned dormitory-style housing, earning thousands of dollars a week playing video games.

Can Etienne be the first person to turn his team into a $1 billion business? There are many hurdles ahead. For one, there’s the money: He spent millions to buy his way into a select group of teams that can compete in the top gaming tournaments, and there’s no guarantee that it will recoup that cost. Cloud9 is working to land valuable marketing deals. There’s also the pressing challenge of making e-sports easier to watch for those who are not hardcore gamers.

In addition to all that, Etienne couldn’t stop worrying about Sneaky.

People have been playing video games competitively since the early 1970s. In 2004, “Halo 2” and “World of Warcraft” revolutionized what it looked like to play video games online with friends. People who took their games seriously trekked to small tournaments to compete for bragging rights and token prize money.

Today, the best players in the world play 14 hours a day and can make decent to spectacular money. Sneaky, a moppy-haired gamer whose real name is Zachary Scuderi, is one of them. He’s among Etienne’s stars. Cloud9 pays him well over $100,000 a year, though it won’t say exactly how much, and he makes many tens of thousands on his own from people paying to watch his stream on Twitch, the video game streaming network. Sneaky has earned more than 85 million views on Twitch by making gaming look easy, but Etienne was starting to worry that his star had lost his focus.

At Xerox, Etienne, a burly, bearded, friendly-faced man, had sold large printers, photocopiers and other services to law firms and insurance companies. Despite the tedium, he excelled. His experience selling that most corporate of items taught him how to pitch just about anything.

But every night, Etienne obsessed over “World of Warcraft,” and he eventually began recruiting players for his top-ranked guild — a group of dozens of players who worked together to slay monsters and harvest precious weapons. He signed copy machine deals during the day and secured elite dragon slayers by night. “There was no money involved. It was competitive, and it mattered a lot to me.”

Growing tired of his day job, Etienne landed a sales job at Curse, a gamer tip site. A year later, he jumped to Crunchyroll, an anime streaming site, to build a sales team. (One of his friends on “World of Warcraft” introduced him to the CEO.) He generated $16 million in sales during his last year at the company, he said. A couple of years into that job, one of the people who bought advertising space from Etienne told him that he should help out a then-17-year-old kid named Andy Dinh. Etienne and Dinh would go on to become power brokers in the e-sports world — and rivals. But at first, they were friends.

Dinh had created a website called SoloMid that had guides on how to play the dozens of characters in “League of Legends.” The site was growing more popular than he knew what to do with. Etienne started giving him advice and then helping him sell ads on the side. SoloMid’s advertising quickly climbed from $3,000 a month to $80,000, and kept growing from there, Etienne said. “Jack helped sign some of our very first partners,” Dinh said. “Jack listens, he’s smart, he’s emotionally intelligent and I learned a lot from him.”

Etienne signed on to manage Dinh’s team, called Team SoloMid, in 2011. Eventually, Etienne’s boss told him to quit the side gig. Etienne did, but soon regretted it. Within months, he decided to quit his day job and form his own team.

In 2013, he spent $23,000 on a five-player team of professional “League of Legends” players with a small following. Soon, he had a mutiny on his hands. The players had wanted one of their friends to buy them, and so instead of fighting, Etienne arranged a sale and then bought the contracts of another group of players. The team chose a new name: Cloud9.

Sneaky was 19 years old and had just moved to Los Angeles from Florida to try making it as a professional. He shared a room with three other gamers and was making $500 a month. After buying the team, Etienne took on a parental role for some of the players, especially younger ones like Sneaky. When he moved the team to San Jose, Etienne picked up Sneaky from the airport. The owner rented an apartment for the team to live in and kept the fridge stocked. When the players clogged the toilet, Etienne brought them a plunger.

That summer, in 2013, Sneaky and his teammates went on a surprise run and made it to the championships. Etienne got more than his money’s worth. A winning team made signing sponsors much easier. The culmination of the following season, in 2014, was bittersweet. Cloud9 lost 3-to-2 to Dinh’s Team SoloMid.

“League of Legends” is a war between two teams of five players each. The winner is decided by which team’s archer, mage, monster, warrior and healer can work together to murder their enemies and destroy their opponents’ base. To be a dominant force, you need to be really good at clicking and typing quickly and precisely, while predicting your opponent’s movements and coordinating with your team. It requires incessant practice.

To watch Sneaky play “League of Legends” is to watch someone transform the game’s most vulnerable characters into powerful opponent-destroyers. Millions of people watch Sneaky play for hours on Twitch while he delivers a dour running monologue.

Under Etienne, Sneaky quickly became the cornerstone of Cloud9. While Sneaky won game after game, Etienne recruited top players around him — and he secured investors to buy their way into the top competition. Over the years, other players came and went. But Sneaky remained, and that was good for business.

For months, Etienne grew convinced that Sneaky was taking an increasingly lackadaisical approach. And in June, Etienne had had enough, announcing he was benching Sneaky along with two other top players. “We’re looking for players to always be hungry,” Etienne said.

The same month that Etienne demoted Sneaky, he announced a major business deal with Red Bull, and soon its logo was plastered all over the team’s jerseys. A national advertiser was betting on Cloud9.

In June, Etienne held a meeting with his investors at one of his team houses in Burbank, to get an update on the business. They eagerly boarded a bus to the Blizzard Arena nestled between Warner Bros. and Walt Disney studios to watch a Cloud9 team play “Overwatch,” a game where gun-wielding avatars blast each other to bits over a small plot of land. Cloud9 won, and a month later, won the national tournament broadcast on ESPN.

Meanwhile, with Sneaky off the premier “League of Legends” team, Cloud9 lost four out of five games at the start of the season. Etienne relented and put Sneaky back on the main roster.